As Connecticut employers of a certain size know, Connecticut implemented Paid Sick Leave recently which affords employees up to five days off a year.   Now, federal contractors (including those in Connecticut) have another layer to deal with. As my colleague Ashley Marshall explains below, paid sick leave will now be a requirement later this year.  Thanks too to my partner Gary Starr who helped pull this together today on short notice.

marshall If we travel back in time to September 2015, President Obama signed Executive Order 13706 (EO) which established a mandate on federal contractors to give their employees up to 56 hours (7 days) of paid sick leave each year.

Today, the Secretary of Labor has issued regulations to implement President Obama’s Executive Order that established a mandate on federal contractors to give their employees up to 56 hours (7 days) of paid sick leave each year.  The regulation goes into effect on November 29, 2016.

Here are some of the highlights:

  1. The Final Rule covers new contracts and replacements for expiring contracts with the fdoctorederal government that result from solicitations on or after January 1, 2017.
  2. Employees will accrue 1 hour of paid sick leave for every 30 hours worked on or in connection with a covered federal contract.
  3. Paid sick leave is capped at 56 hours (7 days) in a year.
  4. Employees may use paid sick leave for their own illnesses or other health care needs, for the care of a loved one who is ill, for preventive health care for themselves or a loved one, for purposes resulting from being the victim of domestic violence, sexual assault, or stalking, or to assist a loved one who is such a victim.
  5. The Final Rule allows for coordination with existing paid time off policies and labor agreements
  6. Employers may require that employees using paid sick leave provide certification from a health care provider of the employee’s need for leave if they use 3 or more days of leave consecutively.

A few other tidbits:

  • Whether an employee has to work a certain number of hours  for coverage depends on whether they work “on” a covered contract or “in connection” with a covered contract.
  • Employees that work “on” a covered contract are those that are performing the specific services called for by the contract. They are covered, regardless of the number of hours worked in a year and regardless of whether they are full or part time.
  • Employees that work “in connection” with a covered contract are  those that perform work activities that are necessary to the performance of the contract, but are not directly engaged in the specific services called for in the contract.  An employee who spends less than 20% of his or her hours working “in connection” with a covered contract in a particular workweek is not covered.

As with many new benefits, employees may try to take advantage of the new regulation, particularly since no medical excuse needs to be provided until the employee is out of work 3 or more days.  Employers are going to need to be vigilant against abuse.

The Final Rule will be published in the Federal Register September 30, 2016, and will go into effect exactly 60 days after its publication. More information can be found on the U.S. Department of Labor’s website in its Fact Sheet and Overview.

Somewhat quietly (at least to me), the Connecticut Department of Labor has issued updated guidance regarding compliance with the state’s Paid Sick Leave law.

But employers who have been following the developments in this area — namely the changes to the law by the legislature — won’t be surprised much by the minor changes that have been made.

The changes to the guidance are essentially in conformity with the revisions to the law.

For example, to determine if an employer is subject to the law, the number of employees that an employer has on the payroll as of October 1st will be used.  It also notes that “radiologic technicians” have been added to the coverage of the law, consistent with the changes.

Nevertheless, if any employers have been using the previous guidance, it’s time to use this useful new resource and discard the prior guidance.

Notably, the CTDOL has also updated their posters for Paid Sick Leave for employers to use.  These new posters should be displayed immediately by employers in place of the old ones.

 

In the hours before the General Assembly’s 2014 session closed, there were a number of bills being watched by employers.  I’ll have an additional recap of the session in the days ahead, but one bill that passed on Wednesday night made a number of small, but important, changes to the state’s Paid Sick Leave law that employers should take note of.

For background on Paid Sick Leave, you can check out some of my prior posts here and here.

House Bill 5269 — which still requires the Governor’s signature — makes several changes that have long been sought.  (For a full recap, see the OLR Bill Analysis here.)  The changes become effective January 1, 2015, when the bill is signed.

First, the bill changes the method for figuring out if a non-manufacturing business employs 50 or more employees.   Under the bill, the company will determine if it satisfies the annual 50-employee threshold based on the number of employees on its payroll for the week containing October 1, rather than the quarterly formula presently used.

Next, the bill prohibits employers from firing, dismissing, or transferring an employee from one job site to another to come under the 50-employee threshold.   Any affected worker can file a complaint with the Labor Commissioner.

The bill also changes the timeframe for accruing paid sick leave and makes it more in line (though not exactly parallel) with the state FMLA law.  As noted by the OLR: “Under current law, employees accrue one hour of sick leave for every 40 hours worked per calendar year. Under the bill, they accrue one hour of paid sick leave for every 40 hours worked during whatever 365-day year the business uses to calculate employee benefits. This allows the employer to start the benefit year on any date, rather than only on January 1.”

And lastly the bill adds radiologic technologists to the list of job categories eligible to accrue and take paid sick leave.

Employers who have been close the 50 employee cut-off should review these rules in particular but all employers should take note of the changes to the accural methods. That should make it easier, in the long run, for employers to track such time.

 

What Would Noah Webster Think?

One of the things that law school teaches you is to read the definitions of words in any new law that is passed. Why? Because a word like “employer” may be defined differently than what you would expect.

That’s a hard concept for real employers to understand. After all, how can you be an “employer” in one part of the law, but not an “employer” in another? Such is the nature of bill drafting.

I’m reminded of that lesson when looking at the Paid Sick Leave Act to determine if towns and cities are covered by the new law.  Here is the relevant portion of definition of employer:

“Employer” means any person, firm, business, educational institution, nonprofit agency, corporation, limited liability company or other entity that employs fifty or more individuals in the state in any one quarter in the previous year, which shall be determined on January first, annually. Such determination shall be made based upon the wage information submitted to the Labor Commissioner by the employer pursuant to subsection (j) of section 31-225a of the general statutes.

Now, you might think, on first glance, municipalities are not covered.  There’s no explicit reference to them. But the word “other entity” is broad enough to likely cover them. Indeed, according to the CTDOL and bill summary prepared by the OLR, they are covered, so long as that town meets the 50 or more individual threshold.  Arguably, school boards and public and private schools may also be subject as well.

You can see this a little more clearly when you contrast this definition with the one in Connecticut’s FMLA law.  That definition states:

“Employer” means a person engaged in any activity, enterprise or business who employs seventy-five or more employees, and includes any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer and any successor in interest of an employer, but shall not include the state, a municipality, a local or regional board of education, or a private or parochial elementary or secondary school.

Since courts presume that the legislature acts logically when it crafts definitions, the difference in definitions is likely to mean something — here, that municipalities aren’t excluded from the paid sick leave law.

If you want to hear more about this law, Heidi Lane from the Connecticut DOL is speaking to the Connecticut Bar Association’s Labor & Employment Section tonight. Details are here.

Yesterday, I discussed the carryover rule that requires employers to allow service workers to carry over up to five days of paid sick leave each year.

Not All Issues in Paid Sick Leave Law are Clear

But a loyal blog reader posed the following question to me: Suppose you are an employer that voluntarily offers 12 paid time off (PTO) days at the start of every calendar year to your employees.  In that case, are you still required to offer 5 carryover days (in addition to the 12 that you offer) to your employees even though you are otherwise compliant with the act?

Rather than opine on the subject in a vacuum, I forwarded the question onto Heidi Lane, who has been among the Connecticut Department of Labor staff members who have been drafting the guidance and overseeing the Department’s response.  She was very kind to respond and my sincere thanks to her and the DOL staff for being so open to discussions on this law.

We had quite a back and forth discussion of the answer and she authorized her response to be used here.  In slightly condensed form, here were some of her responses.  You won’t find this in the guidance (and, to be sure, its merely advisory), but for employers dealing with the issues, this is important to understand the CTDOL’s position:

The law never requires an employer who provides 5 or more paid days (or 40 hours) off that can be used for paid sick leave to ever provide more than that. So, taking your example, if an employer provides 12 PTO days and the service worker uses them all, then there is nothing left to carry over. Using another example, if the service worker uses 5 days for vacation and has 7 of the 12 days remaining at the end of the year, then the service worker has 5 days of paid sick leave that s/he never used and can carry over. However, if the service worker used the 5 days for paid sick, then the law would not require the employer to allow the service worker to carry over the remaining 7 PTO days (that would be the employer’s option).

Her answer prompted a followup question from me: Is it your contention that the employer needs to find out if the employee is using his/her paid time off because of illness? And if the employer doesn’t ask, then service worker gets to carryover 5 days?  She responded as follows:

Yes, we believe that an employer would need to find out whether they are using the time for paid sick leave, vacation…. I know that this will be problematic but we have had many discussions on this. If the employer gives the service worker 12 days of PTO and s/he uses 10 days for vacation, s/he still has 2 days available for paid sick leave.

If an employer gives a bucket of 12 days of PTO on January 1 and replenishes it every January first, then the above situation would not apply.

In my response back to her, I noted that such an interpretation could be at odds with the law itself. In the relevant section,  an employer is “deemed to be in compliance” merely if it “offers any other paid leave…that (1) may be used for the purposes of section 3 of this act, and (2) is accrued in total at a rate equal to or greater than the rate described in subsections (a) and (b) of this section.”  In my mind, the “may be used” language is different from “is used” and onlyly requires an employer who has a PTO policy to allow service workers to use PTO for a reason authorized by the Act.

She replied by stating that my interpretation was adopted by some others, but the Department has taken a different position:

We think the problem with your interpretation is that you are not permitting someone to use the PTO leave for a paid sick leave. The law provides that an employer is “deemed to be in compliance” if it gives service workers the opportunity to use PTO for paid sick leave. So it seems to us that if a service worker uses 5 days in January for a vacation, and then is penalized for using additional days for paid sick leave (i.e., days 6, 7 and 8), the employer has not met the requirements of the law. The law dictates that service workers should be allowed to use paid sick leave without fear of retribution, whether it be a point in an attendance policy or more serious discipline. If the service worker is penalized for using the time for paid sick leave (i.e., days 6, 7 and 8), then he really isn’t being given the opportunity to use the other PTO time for paid sick leave.

We both agreed that this is perhaps one of the issues that may — sometime down the road — end up in court.  But that, of course, isn’t helpful for employers now.

For employers who use PTO policies, you may have to consider asking “service workers” to designate whether their PTO is due to a “sickness” or another qualifying reason for the absence under the act.  Failure to do so and failure to offer a carryover policy may turn an otherwise compliant employer into one that is out of compliance, at least according to the CTDOL.   If the employer allows the employee to carryover 5 unused PTO days a year — or offers the worker generous PTO at the start of each calendar year — then these tweaks may alleviate the risk.

As always, employers should seek their preferred legal counsel to make sure that your particular policy and practice is compliant with this new law.

We continue with our series of posts (see prior posts here, here, here, and here) on the new Paid Sick Leave Guidance issued by the Connecticut Department of Labor earlier this month. Today’s post focuses on the “carryover” rules.

Another issue that the Paid Sick Leave addresses is the “carryover” rules — or how much accrued paid sick days an employee can carryover each year.

In the past, some businesses that have offered paid sick days have allowed employees to carryover those paid sick days from year to year — sometimes in an unlimited fashion.  In time, this became an employer’s de-facto short-term disability plan.  But as insurance offerings have become more sophisticated, employers also began to realize that this could also lead to potential abuse (and a big payout at the end.).  Thus, employers began to limit the amount of time that may be carried over.

The new paid sick leave law recognized the potential for abuse too by only allowing service workers to carryover up to 40 hours (5 days) worth of time each year.  The CTDOL guidance explains this rule a little further and whether employers can pay employees for their unused paid leave.

Service workers shall be entitled to carryover up to 40 hours of any unused accrued paid sick leave at the end of each calendar year. Service workers are limited to carry over 40 hours each year, regardless of how many hours they have accumulated. Some employers either require or provide their employees with the option of being paid out at the end of the year for any unused paid leave. Because the law provides that service workers “shall be entitled” to carry over any unused paid sick leave, employers cannot require service workers to take the pay out. However, employers may offer the option of pay out in lieu of carry over to service workers as long it is voluntary.

Because the act doesn’t go into effect until January 1, 2012, these carryover provisions won’t apply until the calendar year 2013 starts.

For employers who provide paid time off in lieu of paid sick leave, the guidance still does not specify that the carryover provisions that the employer uses must be the same as the law, but a reading of the law suggests that is the case.  Thus, employers should review their PTO policies to determine if they are compliance with these carryover sections.

Last week, I touched on a few aspects of the new Paid Sick Leave Guidance that was released by the Connecticut Department of Labor. (For prior posts, see here, here and here.) Today, I continue to discuss the guidance with a look at when service workers can start using accumulated paid sick leave.

One of the more notable aspects of the Paid Sick Leave law (which, as a reminder, goes into effect on January 1, 2012) is that service workers cannot start to use any accumulated paid sick leave until they have worked 680 hours for the employer. But the new law left a few issues open; the CTDOL guidance has attempted to settle some of these issues.

Counting 680 Hours

Firs, the guidance confirms that the 680 hour requirement is a actual time worked rule. That is, “Service workers cannot use accrued paid sick leave until they have worked 680 hours of employment. The 680 hours must be hours actually worked and does not include any time off (e.g. vacation, paid time off…) taken by the service worker.”

Employers should start counting the 680 hours starts either on January 1, 2012 or whenever the employee is hired, whichever is later.

Second, the guidance confirms that the 680 hour requirement is a “one-time requirement.”  As the guidance states, “Once service workers meet the 680 hours, they never have to meet it again for the same employer.”

What does this mean in practical terms? It means that if a service worker works 300 hours for the employer, then resigns, then starts working for the same employer 5 years later, the 300 hours that the worker worked must be counted towards the 680 hour threshold.  For employers, that means that an employee’s hours need to be retained forever — or at least until that worker hits 680 hours.

Third, the guidance sheds some light on a little-discussed provision. “After the service worker meets the 680 hours requirement and seeks to use accrued paid seek leave, [he or she] can use accrued time only if the service worker [has] worked an AVERAGE of 10 hours per week in the most recent completed calendar quarter.”    This will have a big impact for employers who use seasonal workers or lots of part-time workers.   Note that it does not require employees to work 10 hours each week — rather merely an average of 10 hours a week.

As I’ve stated before, the paid sick leave law promises to be among the more challenging endeavors for employers to track. Be sure to work closely with any payroll service you have to make sure that you are tracking the time properly.

(We’ll address this law and other new developments at our upcoming free seminar on Thursday. There are just a few seats available.)

This is the second in a series of posts on the new Paid Sick Leave Guidance from the Connecticut Department of Labor.

Back in June, I discussed who is a “service worker” under the new Paid Sick Leave law.  It is a detailed list that  includes butchers and bakers but not candlestick makers.

Occupations and Their Codes are More Important Than Ever

It’s not quite as simple as that, of course. The definition of a service worker is “an employee primarily engaged in an occupation with one of the following broad or detailed occupation code numbers and titles, as defined by the federal Bureau of Labor Statistics Standard Occupational Classification system or any successor system.”  It then provides a list of code numbers and job titles.

But even that is not the end of the discussion, according to the new  guidance from the Department of Labor:

The statute provides a complete list of classifications that qualify as service workers. If a job title is not listed specifically, it does not mean that the job is not included in one of the prescribed classifications. The employer must read the broad and detailed occupations and descriptions provided on the Bureau of Labor Statistics website: www.bls.gov/soc.

In addition, if an employee performs more than one job, the employer must use the classification in which the employee is primarily engaged to determine his/her status as a service worker.

Stated another way, employers need to review the database of occupations and descriptions to determine if what the employee does (job title notwithstanding) falls within the job classifications in the statute.

This can lead to even more questions. For example, the SOC description for “Childcare workers” is as follows:

Attend to children at schools, businesses, private households, and childcare institutions. Perform a variety of tasks, such as dressing, feeding, bathing, and overseeing play. Excludes “Preschool Teachers, Except Special Education” (25-2011) and “Teacher Assistants” (25-9041).  Illustrative examples: Nanny, Au Pair, Daycare Provider

So, preschool teachers are out but those workers who oversee preschool-age kids are covered. Got it?

Then there is the “Front Line Supervisors of Retail Sales Workers” which is defined as follows:

Directly supervise and coordinate activities of retail sales workers in an establishment or department. Duties may include management functions, such as purchasing, budgeting, accounting, and personnel work, in addition to supervisory duties.

This could be pretty broad.

So, as an employers, you have a few main options. First, you can review all your job descriptions and determine which ones are covered by the act, one by one.  Or second, as this is probably what the General Assembly was hoping for, you can just implement a paid sick policy in general without regard to job description.

Either way, don’t just rely on the titles contained in the “Service Worker” definition.  The Paid Sick Leave Guidance suggests doing something more.

When I reviewed the Paid Sick Leave Guidance released Friday by the Connecticut Department of Labor, I happened to be in Chicago for the day.  And where should I pass by? But Harry Caray’s.

The renowned Cubs broadcaster’s catchphrase was “Holy Cow!” And that phrase was stuck in my head for the weekend.

Holy Cow!

Why? Because each time I read the guidance, there’s something new and big that jumps off the page to show that this law is going to have a broad impact on many employers that will be caught off guard with it.  Because the guidance is overwhelming, I’m going to write a few posts about some key aspects of the guidance this week. Today’s post focuses on manufacturers because it turns out Not All Manufacturers Are Exempt From the Law After all

Indeed, when the new law was passed, manufacturers took great solace in the language of the statute which appeared to exempt all manufacturers from coverage. The language of the statute exempts, “Any business establishment classified in sector 31, 32 or 33 in the North American Industrial Classification System.”

But not so fast says that the Connecticut Department of Labor.  While manufacturers in “general” may be exempt, there are some exceptions which relate to the use of the word “establishment”.

It turns out that when the NAICS refers to one facility as an “establishment”, it generally means a “single physical location”.  It typically refers to an entire company as an “enterprise.”

This makes a difference, according to the CTDOL.  “Each ‘establishment’ should be assessed separately to determine if the primary business activity falls within sector 31, 32 or 33. That means that an employer may have one facility subject to the law and other facilities that are not.”

The Guidance suggests that a manufacturing establishment in Town A may be exempt, while its distribution center in Town B may be subject to the law.

Confused yet? Well the guidance goes further.  If a manufacturer has a two or more buildings in a “campus” type setting (typically at one address), such campus shall be considered one physical location. If the primary activity of that campus is manufacturing, then all of the campus will be exempt from this law.”

So, for employers in Connecticut who do manufacturing, the two main issues that they will need to figure out is:

1) If they have a campus, is “manufacturing” the primary activity of the campus? If so, then the entire campus is exempt.

2) If they have various facilities around the state, only those that do primarily manufacturing will be exempt.  Corporate offices (apart from the manufacturing facilitiy) or other support centers will not be exempt.

Thus, if you were a manufacturer and thought that your entire company was exempt from the law in Connecticut, think again. This new guidance suggests a level of analysis that may alter that equation.

The Connecticut Department of Labor has issued its long-awaited guidance this morning on the new Paid Leave Law that becomes effective on January 1, 2012.

You can download the CTDOL’s guidance here.

My cursory review of the guidance indicates that it answers some questions that have been floating out there — albeit in ways that employers may not like.

For example, the DOL has confirmed that the 680 hour threshold that an employee needs to work before the employee is eligible to take paid sick time is a lifetime requirement at an employer. In other words, if an employee works 500 hours for an employer, then has a break in service and returns, those 500 hours still count towards being able to take paid leave. It is consistent with some of the issues we’ve discussed on this blog before.

Because the guidance has lots of information, I will followup in the next few days with some additional thoughts on it.

But in the meantime, this guidance should be required reading for all who have any questions about the paid sick leave.

The DOL has also issued a poster in English that needs to be posted by January 1, 2012. A version in Spanish is in the process of being translated, according to the DOL, and will be available soon.